November 10th, 2016

Browncoat party

What To Expect From the Unexpected, Part Two

Continuing my comments on Trump's promised to do list. Yesterday's discussion of the first half is here.

The last section is a list of proposed legislation.

1. Middle Class Tax Relief And Simplification Act. An economic plan designed to grow the economy 4% per year and create at least 25 million new jobs through massive tax reduction and simplification, in combination with trade reform, regulatory relief, and lifting the restrictions on American energy. The largest tax reductions are for the middle class. A middle-class family with 2 children will get a 35% tax cut. The current number of brackets will be reduced from 7 to 3, and tax forms will likewise be greatly simplified. The business rate will be lowered from 35 to 15 percent, and the trillions of dollars of American corporate money overseas can now be brought back at a 10 percent rate.
Gah. A national economy is too big to plan. It's organic and the unintended consequences always dwarf the intended results of government action. The Nazi Four Year Plan didn't work, the Soviet Five Year Plans didn't work, and this won't work to get the results promised.

As for the content: I'm a middle class guy with two kids, and I'd be happy to take a tax cut. Apple will be happy to have its income tax bill cut. How the heck is he going to pay for all this? Possibly he's not. The national debt will hit twenty trillion dollars about the time Trump's Treasury Secretary is approved. If he's planning a bankruptcy he might as well hand out some candy beforehand. Trump is one politician I could see attempting to do the Big Haircut.

2. End The Offshoring Act Establishes tariffs to discourage companies from laying off their workers in order to relocate in other countries and ship their products back to the U.S. tax-free.
No, not more tariffs. That makes everybody in both countries poorer. If you want to help laid off workers, give them a voucher for a U-Haul trip and three month's rent anywhere in the country so they can move to where the jobs are.

3. American Energy & Infrastructure Act. Leverages public-private partnerships, and private investments through tax incentives, to spur $1 trillion in infrastructure investment over 10 years. It is revenue neutral.
Now he wants to be revenue neutral? I have my doubts about that anyway. Most analyses of that kind of project make the business case close by projecting rosy revenue benefits from the infrastructure in the outyears. By the time it's built the politicians have retired and the consultants have moved on to new projects.

4. School Choice And Education Opportunity Act. Redirects education dollars to gives parents the right to send their kid to the public, private, charter, magnet, religious or home school of their choice. Ends common core, brings education supervision to local communities. It expands vocational and technical education, and make 2 and 4-year college more affordable.
School choice is great and I'm all for it. Given that school are mostly paid for by local property taxes and state revenue sharing I'm wondering where the Feds come into this. Of course, they are in local education with Common Core, so I'm good with getting them out of that. Vo-tech education is undersupported, more of that would be good (Mike Rowe for Secretary of Education?).

The part I don't like is the last. Making "2 and 4-year college more affordable" has resulted in tuition increases in the amount of whatever subsidy was given to students. That's why my entire Ivy-level education in the 80s cost less than one year at a no-name private school now.

5. Repeal and Replace Obamacare Act. Fully repeals Obamacare and replaces it with Health Savings Accounts, the ability to purchase health insurance across state lines, and lets states manage Medicaid funds. Reforms will also include cutting the red tape at the FDA: there are over 4,000 drugs awaiting approval, and we especially want to speed the approval of life-saving medications.
"Replace" is certainly needed. Just repealing would be a disaster. The health insurance plans that existed in 2009 are mostly gone, replaced by ones shaped to fit the ACA's requirements ("If you like your plan . . ."). I like HSAs, I've been using the one sponsored by my company to the maximum extent. Purchasing across state lines will be good for the people whose exchange providers have pulled out. Medicaid is the "public option" last resort. We may wind up with a suggestion I made back during the ACA debate--being denied coverage for a pre-existing condition is a qualifier for Medicaid coverage. If not, there has to be some way of handling people who fall through the cracks. Possibly a temporary bridge coverage program ("There's nothing as permanent as a temporary government program"). I'd want something more innovative.

Reforming the FDA is very overdue. The agency is too incentivized to reject drugs even if they'd be a net benefit. The dying should be allowed to gamble on new treatments.

6. Affordable Childcare and Eldercare Act. Allows Americans to deduct childcare and elder care from their taxes, incentivizes employers to provide on-side childcare services, and creates tax-free Dependent Care Savings Accounts for both young and elderly dependents, with matching contributions for low-income families.
I'm fine with that. How we pay for it ties back to #1.

7. End Illegal Immigration Act. Fully-funds the construction of a wall on our southern border with the full understanding that the country Mexico will be reimbursing the United States for the full cost of such wall; establishes a 2-year mandatory minimum federal prison sentence for illegally re-entering the U.S. after a previous deportation, and a 5-year mandatory minimum for illegally re-entering for those with felony convictions, multiple misdemeanor convictions or two or more prior deportations; also reforms visa rules to enhance penalties for overstaying and to ensure open jobs are offered to American workers first.
Ah, he's going to ask Congress to pay for the Wall. Because Mexico will not contribute a peso to the project. I'm okay with the wall itself, though I'm more motivated by wanting to keep out terrorists than workers. Punishing repeat illegal immigrants will reduce the labor competition for low-end American workers. Ensuring "open jobs are offered to American workers first" could get very messy, I suspect Silicon Valley will be extremely unhappy with that.

8. Restoring Community Safety Act. Reduces surging crime, drugs and violence by creating a Task Force On Violent Crime and increasing funding for programs that train and assist local police; increases resources for federal law enforcement agencies and federal prosecutors to dismantle criminal gangs and put violent offenders behind bars.
Federal interference in local law enforcement is a bad idea. Ad hoc support for locals who request assistance, sure. Permanent task forces will attract empire builders and stormtrooper wannabees.

9. Restoring National Security Act. Rebuilds our military by eliminating the defense sequester and expanding military investment; provides Veterans with the ability to receive public VA treatment or attend the private doctor of their choice; protects our vital infrastructure from cyber-attack; establishes new screening procedures for immigration to ensure those who are admitted to our country support our people and our values.
AKA the Preserve Karl's Job Act. The military is run ragged. They need more troops to cover the missions they're assigned, not a bunch of fancy new gadgets. I fear Trump will be way too fond of huge, second to none systems and less interested in recruiting. Offering choices to vets for medical treatment I'm for; this could work out like doc stamps.

Immigration screening procedures. Yeah, this should be in a different bill. It's a big can of worms unrelated to the Defense Department. Testing people to see if they "support our values" requires a specific set of values to be agreed on. We don't have that agreement, which is why we argue so furiously over politics. We do have broad agreement on some basic principles which get discussed in the citizenship test. But that's a wide enough net to let in anyone short of Communists wanting to overthrow the government. I suspect this is a euphemism for keeping out Muslims who want to enforce Sharia law over civil law. I'll confess a little sympathy for that but putting a religious test on immigration is a step on a very nasty slippery slope and I don't want to go there.

If I was asked to set up a screening procedure I'd offer a multiple choice question: "The mayor needs to arrange for trash pick up for his town. Which should he choose?"
A. The company with the lowest bid.
B. His brother-in-law's company.
C. A company handling a neighboring town's trash well.
D. Hire new town employees to do it.
And then keep out everyone who picked B or D.

10. Clean up Corruption in Washington Act. Enacts new ethics reforms to Drain the Swamp and reduce the corrupting influence of special interests on our politics.
This would be the codification of the ethics rules discussed in the previous post. None of which will solve corruption. Look, the federal government is spending $3,800,000,000,000 a year. That's trillions. A petty bribe or favor that directs a tiny part of that stream to another channel will be cost-effective at almost any level of personal bribery. You can change which people get bribed, but the incentive will be there as long as politicians have so much power. If you don't want people buying them, make them worth less by reducing their power.